Robinhood Markets (Nasdaq: HOOD) is exercising caution in response to a lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance and Coinbase. The Chief Legal and Corporate Affairs Officer of Robinhood, Dan Gallagher, confirmed during a hearing before the US Congress that the company is investigating its cryptocurrency offerings. Gallagher stated that Robinhood is actively reviewing the regulator’s analysis to determine any necessary actions.
According to a Bloomberg report, the American brokerage is carefully examining the SEC’s findings to assess the appropriate course of action. While Robinhood is renowned for its commission-free stock trading services, it also provides cryptocurrency trading. However, compared to larger exchanges such as Binance and Coinbase, Robinhood’s cryptocurrency offerings are relatively limited, with only around 18 listed cryptocurrencies. Notably, some of these cryptocurrencies, including Solana, Cardano, and Polygon, have now been classified as unregistered securities.
In the SEC’s lawsuit against Binance, its US affiliates, and Changpeng Zhao, the commission labeled Binance Coin (BNB) and Binance USD (BUSD) as unregistered securities. Furthermore, the SEC categorized ten additional digital currencies offered by Binance as unregistered securities. These include Solana’s SOL, Cardano’s ADA, Polygon’s MATIC, Filecoin’s FIL, Cosmos’ ATOM, Sandbox’s SAND, Decentraland’s MANA, Algorand’s ALGO, Axie Infinity’s AXS, and Coti’s COTI tokens. Consequently, the SEC now identifies a total of 61 cryptocurrencies as unregistered securities.
Furthermore, the Securities and Exchange Commission (SEC) is currently involved in a lengthy legal battle with Ripple, a blockchain company, regarding the classification of XRP. The SEC alleges that XRP should be considered unregistered securities. In response to the lawsuit, several cryptocurrency trading platforms focused on the US market delisted XRP.
While Robinhood did not explicitly state its intended actions, it is highly likely that the broker will follow suit and delist the cryptocurrencies that have been categorized as unregistered securities by the SEC. This decision would help Robinhood avoid potential negative regulatory consequences.
In December of the previous year, Robinhood received an investigative subpoena from the SEC. The subpoena was related to various topics, including the cryptocurrency listings offered by Robinhood, the custody of cryptocurrencies, and the operations of the platform. This information was disclosed in a regulatory filing by the exchange.
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